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Friday, May 26, 2017

Recent IT Layoffs was Sad, Says Infosys Founder Narayana Murthy

Founder
Chairman of Infosys N R Narayana Murthy today expressed sadness over the IT
companies laying off their employees as part of their cost cutting strategy.

"...It is sad...," Murthy told in an email reply to a PTI query about
recent IT layoffs. Murthy, however, did not elaborate on the matter.

Infosys had announced that it could hand out pink slips to hundreds of mid and
senior-level employees as it carries out bi-annual performance review amid a
challenging business environment.

The development comes at a time when its peers Wipro and Cognizant are taking
similar measures to control costs.

The US-based Cognizant had rolled out a voluntary separation programme for
directors, associate VPs and senior VPs, offering them 6-9 months of salary.

Wipro, too, is learnt to have asked about 600 employees to leave as part of its
annual "performance appraisal" even as speculations were that the
number could go as high as 2,000.

According to executive search firm Head Hunters India, the job cuts in IT
sector will be between 1.75 lakh and 2 lakh annually for next three years due
to under-preparedness in adapting to newer technologies.

A report submitted by McKinsey & Company at the Nasscom India Leadership
Forum said, nearly half of the workforce in the IT services firms will be
"irrelevant" over the next 3-4 years.

IT companies have been one of the largest recruiters in the country. However,
they have warned that increasing automation of processes would lead to reduction
in hiring in coming years.

While the outsourcing model has placed India on the global map, increasing
scrutiny and rising protectionist sentiment are also posing challenges for the
USD 140 billion Indian IT industry.

Companies are now working towards reducing their dependence on work visas and
instead hiring more locals to ensure continuity of work for clients, even
though it impacts their margins.